A loan assumption occurs when a buyer purchases a property and takes over a seller’s existing mortgage loan through the lender. Many types of commercial loans can be assumed, including most Fannie & Freddie Mac, HUD multifamily and even commercial mortgage-backed securities.
This in-depth CLE will discuss how the unprecedented rise in interest rates has led many real estate investors looking to acquire real property to consider assuming a seller’s existing debt with low fixed interest rates. Andrew Demirchyan will mainly cover: benefits & downsides of a loan assumption for the buyer & seller, purchase & sale considerations, diligence best practices when an acquisition includes a loan assumption, steps, strategies & mitigating risks in executing assumable mortgage deals and lender & loan servicer considerations in executing assumable mortgage deals. Subjects detailed by Andrew: current market conditions, seller’s representations & warranties regarding the existing debt, lender’s approval of the loan assumption, loan assumption timeline, assumption fees + other costs, assignment of reserves, survival period, understanding the timeline & managing client expectations.
With a strong background working in nearly all aspects of real estate in California – from property management, residential and commercial real estate transactions, to real estate development and preservation work – Andrew Demirchyan, Esq., skillfully aids clients in navigating complicated and ever-changing real estate laws.